Market Snapshot: Heat pumps could significantly reduce GHG emissions from Canada’s buildings

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Release date: 2023-12-20

Heat pumpsDefinition* are two to four times as energy efficientDefinition* as other space heatingDefinition* systems currently used in Canada.Footnote1 Space heating accounts for about 60% of the energy used in Canada’s residential and commercial/institutional buildings today. Replacing space heating systems with heat pumps can be a major contributor to reducing this sector’s energy use and related greenhouse gas (GHG) emissionsDefinition*.

The number of residential heat pumps installed in Canada doubled over the last two decades to over 800,000 units. Over 60% of that increase came from single detached homes in Ontario and Quebec (Figure 1).

Figure 1: Residential Heat Pumps Installed in Canada by Building Type

Source and Description

Source: Residential Sector – Canada, Natural Resources Canada

Description: This stacked bar chart shows the stock of residential heat pumps installed in Canada in thousands of units for 2000 to 2020 (the latest available data). Data can be filtered by region, and by type of residential building. In 2000, there were 414,000 heat pumps installed in Canada, 350,000 of those (or 85%) across single detached homes. Ontario and Quebec combined accounted for 78% of total heat pumps that year. By 2020, the number of heat pumps installed in Canada’s homes more than doubled to 842,000 units, with single detached homes in Quebec and Ontario combined, accounting for nearly two-thirds of the total that year.

Energy savings and GHG emissions reduction potential from heat pumps

Despite this rapid growth, heat pumps remain a niche technology in Canada, meeting just over 5% of space heating needs in residential buildingsFootnote2 (compared to 10% globally).Footnote3 The energy savings and GHG emissions reduction potential from heat pumps in Canada can be illustrated by:

  • Energy used for heating residential and commercial/institutional buildings combined currently accounts for 16% of all energy used in CanadaFootnote4 and 13% of energy related GHG emissions.Footnote5
  • Electricity used to heat homes (instead of fossil fuelsDefinition* or wood) in Canada has increased from 21% of the total in 2000 to 31% by 2020, mostly from the installation of electric baseboardDefinition* heating systems – which are only half as efficient as heat pumps (see footnote 1).
  • Continued decarbonization of Canada’s electricity means less GHGs emitted per unit of energy used when compared to other home-heating fuels like heating oil, propane, or natural gas.
  • Rising efficiencies of new heat pump models.

Despite these advantages, heat pumps are not without their challenges. These include higher upfront costs relative to other systems; potentially complex permitting and installation processes; and limits in operating conditions in very cold weather and the associated need for backup systems.

EF2023 projects heat pumps will make up 50% of residential heating demand in 2050

The Canada’s Energy Future 2023 Global Net Zero Scenario projects total GHG emissions from Canada’s residential and commercial/institutional buildings to decline by 71% between 2021 and 2050.Footnote6 In that scenario, heat pumps satisfy 13% of Canada’s residential space heating demand in 2030, 30% in 2040, and 50% in 2050. This represents a more than two-fold increase over current levels by 2030, five-fold by 2040, and nine-fold by 2050. Other net-zero projections show a similar or higher level of heat-pump adoptionFootnote7 – illustrating the rapid pace of deployment and adoption needed to maximize this technology’s energy savings and GHG emissions reduction potential in a net-zero future.

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